Course handbook MSc in Real Estate MSc in Real Estate Investment September 2012
Contents Section 1 Course Directors Welcome... 1 Section 2 Programme Information... 2 Programme Aims... 2 Programme Structure... 3 Assessment Matrix... 4 Term Dates and Examination Periods... 5 Section 3 Module Descriptions... 6 Applied Valuation and Taxation... 6 International Real Estate Markets... 7 Investment Markets... 8 Landlord and Tenant Law... 9 Portfolio Risk Management... 10 Property Valuation... 11 Quantitative Methods... 12 Quantitative Methods In Investment... 13 Real Estate Asset Management... 14 Real Estate Capital Markets... 15 Real Estate Debt Markets... 16 Real Estate Development And Planning... 17 Real Estate Economics... 18 Real Estate Finance... 19 Real Estate Investment and Financial Analysis... 20 Real Estate Investment and Market Analysis... 21 Real Estate Modelling and Market Dynamics... 22 Business Research Project... 23 Elective Information... 25 Section 4 Regulations... 26 Periods of Registration... 26 Degree Requirements... 26 Assessment Calculations... 26 Coursework... 27 Failure and the Re-sitting of Modules... 27 Award of Distinction... 27 Award of Merit... 28 Postgraduate Diploma... 28 Grade Related Criteria... 29 Section 5 Additional Information... 30 MSc Course Office... 30 Moodle: Your Virtual Learning Environment... 30 Personal Tutors... 31 Academic Staff Contact Details... 31 The Royal Institution of Chartered Surveyors... 31 The Investment Property Forum... 32 Real Estate Careers... 32
Section 1 Course Directors Welcome From all the staff in the Real Estate Finance & Investment Group, welcome to Cass Business School and your Masters programme. We hope you will have an instructive and enjoyable year with us. You are joining more than 100 students from all over the world with a wide range of previous degrees, the majority with no knowledge of real estate. On graduation, most of you will be looking to take the first steps on a career in the real estate industry. Our shared task is to ensure that students from such varied backgrounds have the skills and the confidence they need to succeed as real estate professionals. This handbook summarises key information on the real estate Masters which you will need through the year. You should note in particular the schedule for teaching and examinations in Section 2, plus the guidelines on coursework and explanation of how your overall results will be built up in Section 3. For more general background, Section 5 tells you about the staff who will be teaching on the courses and gives some initial comments about looking for jobs in real estate. Learning all you need to know to become an effective real estate professional in the space of one year is no easy task. Both our Masters degrees are designed to help you do that; both are fully accredited by the Royal Institution of Chartered Surveyors (RICS) and highly valued by employers. They are different in emphasis. The MSc in Real Estate is a broadly-based course, which opens up a wide range of career paths. It combines modules in the long-established real estate skills of valuation, development and market analysis with a good grounding in quantitative analysis, finance and investment. Options in the second term cater for those who are aiming for graduate entry into a firm of UK surveyors, and those intending to enter jobs overseas, or in other branches of the industry such as fund management, development or banking. The MSc Real Estate can be summarised as a real estate programme with good foundations in finance and investment The MSc in Real Estate Investment has a different focus, which could be summarised as a course in finance and investment which uses real estate as its subject matter. Alongside a good foundation in real estate skills, it provides a higher level of quantitative analysis and a focus on financial markets in real estate shares, debt securities and derivatives. It is designed for students who aim at careers in those aspects of the industry which are found not only in banking and fund management but also among the traditional real estate employers such as chartered surveyors and property companies. On both degrees you will find a lot to learn. At first you may feel swamped with new concepts and information. But over the course of the year - if you keep up with the lectures, reading and assignments - the pieces should fit together into a coherent picture. And we hope you will find time to enjoy your time in London and at Cass alongside the hard work. If at any time you think you have lost track of the aim of the courses, or you are struggling to keep up with the work, we will be happy to help. George Herd, Course Director MSc Real Estate Stephen Lee, Course Director MSc Real Estate Investment 1
Section 2 Programme Information Programme Aims Real estate land and any structures on it is big business. It accounts for around half of global wealth and the diverse activities associated with it construction, building management, leasing, trading, fund management, finance together make up a larger fraction of UK GDP than the manufacturing sector. So careers in the real estate industry take many forms, and call up a wide range of skills. Some, the long-established real estate skills, focus on the management of buildings, brokerage of leases or investment sales, and asset valuation. Over the last fifty years, investment in real estate has grown massively, and added another set of real estate careers in fund management and finance. Most recently, the growth of mortgage backed securities, listed real estate firms and the introduction of derivatives based on real estate indices has created a third layer of financial engineers and traders who specialise in real financial markets. A well-rounded real estate professional - even a specialist in one area - needs to be familiar with other aspects of the industry. Property valuers should consider the impact of global capital flows on their market. To calculate risk, traders in mortgage-backed securities have to assess the quality of the buildings and leases that underpin the loans. This poses a challenge for real estate education. It has become impossible for any individual to have in-depth understanding and skills in all aspects of modern real estate. Our Masters programmes aim to produce graduates who would not claim to be specialists in everything in real estate, but are familiar enough with at least the concepts and methods used outside their area of expertise to see the complete picture of the industry. Both the MSc Real Estate and MSc Real Estate Investment, therefore, equip successful students with: A thorough knowledge of the modern techniques applied to income flows, valuation and appraisal in the real estate industry. Strong analytical skills in real estate, finance and investment and the ability to apply those skills to practical questions. An understanding of the economic and financial context for real estate markets and asset values. Specific knowledge of real estate, finance and investment is coupled with general business skills including: Clear oral and written communication. The confident use of information technology. The ability to work effectively both individually and in groups. The two Masters programmes, and options within the MSc Real Estate degree, offer differences in emphasis within the shared overall objectives: 2
The MSc Real Estate emphasises core real estate skills, with sets of options recommended for those intending to work as chartered surveyors in the UK or those intending to work in other areas of the industry or overseas. The focus of the MSc Real Estate Investment is on quantitative analytical skills applied to real estate fund management and financial markets. Programme Structure MSc Real Estate Term One Real Estate Economics Quantitative Methods in Investment Real Estate Asset Management Property Valuation Term Two Real Estate Investment and Market Analysis Plus three modules selected from: Applied Valuation and Taxation Landlord and Tenant Law International Real Estate Markets Real Estate Development and Planning Real Estate Finance Term Three Three Elective modules Business Research Project MSc Real Estate Investment Term One Real Estate Economics Quantitative Methods Investment Markets Real Estate Investment and Financial Analysis Term Two Real Estate Capital Markets Real Estate Debt Markets Portfolio Risk Management Real Estate Modelling and Market Dynamics Term Three Three Elective modules Business Research Project Please refer to the matrix on page four for related assessment weightings. 3
Assessment Matrix Contact Hours Credits Weights of each part of assessment in module mark Weights of each module in degree total Coursework Exam Core Modules Term 1 Core 1 30 15 25% 75% 8.33% Term 1 Core 2 30 15 25% 75% 8.33% Term 1 Core 3 30 15 25% 75% 8.33% Term 1 Core 4 30 15 25% 75% 8.33% Total Term 1 120 60 33.33% Term 2 Core 5 30 15 25% 75% 8.33% Term 1 Core 6 30 15 25% 75% 8.33% Term 1 Core 7 30 15 25% 75% 8.33% Term 1 Core 8 30 15 25% 75% 8.33% Total Term 2 120 60 33.33% Total Core Modules 240 120 66.67% Elective Modules Elective One 18 10 100% 5.56% Elective Two 18 10 100% 5.56% Elective Three 18 10 100% 5.56% Total Elective Modules 54 30 100% 16.67% Business Research 30 100% 16.67% Project Degree Total 295 180 100% ECTS equivalencies Each MSc course is worth between 180-210 CAPS credits. As a general rule two CAPS credits equal one ECTS credit. (For example, a course with 180 CAPS credits is worth 90 ECTS credits.) *CAPS (Credit Accumulation of Programme Specification) *ECTS (European Credit Transfer and Accumulation System) Note: Coursework may take the form of an individual assignment, group assignment or invigilated test. 4
Term Dates and Examination Periods Induction 16 28 September 2012 Term One 01 October 07 December 2012 Term One Examinations 14 25 January 2013 Term Two 28 January 12 April 2013 Term Two Examinations 29 April 10 May 2013 Term Three 13 May 28 June 2013 Term Three Assessments 01 12 July 2013 Re-sit Examinations and Assessments (terms one, two and three) 19 30 August 2013 Business Research Project Submission Date 02 September 2013 Students are expected to be in attendance at lectures and classes during term time, and to attend all class tests and other courseworks which may fall during term time. Students should not therefore make travel arrangements during term time. Any absence from any form of assessment, which does not constitute valid extenuating circumstances, will result in the student re-sitting the module as a second attempt 5
Section 3 Module Descriptions Applied Valuation and Taxation SMM199 (MSc Real Estate) Module leader Sessions Assessment Educational aims Patrick Bond, Visiting Lecturer 10 x 3 hour sessions This module will be assessed bycoursework (25%) and an examination (75%) Property taxation and rates have a significant impact both on users of property and on valuation and investment decisions. Surveyors need to be aware of these in order to advise business people in order that they may make informed choices about property matters. This module provides students with a thorough grounding in the various types of local and national taxes affecting property and how these are incorporated in the valuation process Learning outcomes Appreciate the reasons for the taxation of real estate. Demonstrate a working knowledge of the different forms of taxation and how they affect property Apply different valuation methods to solve property valuation problems where issues of taxation arise Appreciate the importance and contribution of the valuation surveyor both in relation to advising clients on taxation issues and as an independent expert witness before courts and tribunals Syllabus Taxes: Capital Gains, Inheritance, Stamp Duty Land, Value Added Tax on property Valuations for Capital Gains Tax, Inheritance Tax and VAT Council Tax, Business Rates, rateable occupation and the hereditament Basis of assessment, the hypothetical tenancy and valuation dates Methods of valuation for rating The borderline between rating and council tax The appeals process for rating, empty property rates Reading list P.H. Bond & P.K Brown, Rating Valuation, Principles and Practice, 3 rd Ed, Estates Gazette 2010 6
International Real Estate Markets SMM176 (MSc Real Estate) Module leader Sessions Assessment Tony Key, Professor of Real Estate Economics 10 x 3 hour sessions This module will be assessed bycoursework (25%) and an examination (75%) Educational aims The globalisation of real estate has lagged behind other asset classes. The last decade, however, has seen a surge in new cross-border investment vehicles and capital flows. International diversification is now a core strategy of real estate investors. A sound knowledge of international markets is therefore essential to an understanding of how markets behave and a key aspect of the skills required by employers in the industry. The module will integrate material from other elements of the course on portfolio construction, real estate economics, and market analysis into a framework for the understanding of globalised real estate markets and add new material on the classification, structure and performance of a range of national markets. Learning outcomes Analyse the arguments for and against international real estate diversification Assess the investment potential of national real estate markets Apply portfolio optimisation techniques to international real estate data Apply presentation skills to the production and delivery of the investment prospectus Syllabus The history of international real estate investment The case for global investment: diversification, opportunity set, home bias Currency risk and risk management in real estate International real estate market sizes, information, transparency, performance Accessing global real estate: direct and indirect, listed and unlisted vehicles Global real estate fund managers and funds Initial reading list Baum A. E. and Harzell D., Global Property Investment: Strategies, Structures, Decisions, John Wiley & Sons, 2012 Hoesli, M., Lekander, J. and Witkiewicz, W., (2004) International evidence on real estate as a portfolio diversifier, Journal of Real Estate Research, Vol. 26, pp. 161-206 7
Investment Markets SMM158 (MSc Real Estate Investment) Module leader Sessions Assessment Professor David Blake, Professor of Finance 10 x 3 hour sessions This module will be assessed bycoursework (25%) and an examination (75%) Educational aims This course aims to comprehensively examine the broad investment markets. It aims to place into context the role of real estate as an investment asset by examining alternative investment vehicles. The module will examine asset valuation and the principles of portfolio diversification across a wide variety of asset classes including: equities, fixed-income securities, derivatives and the foreign exchange markets. Learning outcomes Understand the principles of the efficient market hypothesis Understand the theoretical basis and application of Modern Portfolio Theory Understand equilibrium pricing models such as the Capital Asset Pricing Model and Arbitrage Pricing Theory and understand their strengths and weaknesses Appreciate the workings, pricing and dynamics of the fixed income market Value derivative securities such as futures, forwards and options Syllabus The efficient markets hypothesis and the predictability of equity returns Modern portfolio theory and asset pricing models Fixed income markets, bond pricing and the term structure of interest rates Foreign exchange markets and international investment Forward and futures Option markets and pricing Reading LIST David Blake (1999) Financial Market Analysis (2 nd edition), John Wiley & Sons, 8
Landlord and Tenant Law SMM175 (MSc Real Estate) Module leader Sessions Assessment Elliot Shatzberger, Visiting Lecturer 10x 3 hour sessions This module will be assessed bycoursework (25%) and an examination (75%) Educational Aims The relationship between landlords and tenants is fundamental in the assessment of both rents and capital values of property. This module explains how English law governs landlord and tenant relationships and how law is taken into account in valuation. The module provides an in depth knowledge of the legislation and case law affecting the commercial and residential property markets. It also enables students to apply this knowledge in theoretical and real situations. Learning Outcomes Be fully conversant with the main principles of landlord and tenant relationships under common law, equity and statute Appreciate and understand the different points of view of both landlords and tenants when dealing with real estate issues Show confidence in an ability to recognise, avoid or solve legal problems and to communicate needs and wishes to lawyers Appreciate methods of resolving disputes apart from court action Demonstrate a sound knowledge of the legislation and case law affecting the commercial and residential property markets Be able to apply legislation and case law to issues relating to landlord and tenant relationships Syllabus Easements, profits and covenants affecting land Creation and effect of leases in law and in equity; assignment and determination Covenants and terms commonly found in leases The law of landlord and tenant, remedies for landlord and tenant given breaches Statutory control of business and residential tenancies Reading List Wilkie, M. Luxton, P. Morgan, J. & Cole, G. (2006) Landlord and Tenant Law, 5th Ed, Palgrave Macmillan Garnier, S. (2008) A Practical Approach to Landlord and Tenant, 5th Ed, OUP, Blackstone Press Evans, D. (2004) The Law of Landlord and Tenant, Butterworths Blackstones Statutes on Landlord and Tenant Law, latest edition 9
Portfolio Risk Management SMM194 (MSc Real Estate Investment) Module leader Sessions Assessment Stephen Lee, Senior Lecturer in Real Estate Finance 10x 3 hour sessions This module will be assessed bycoursework (25%) and an examination (75%) Educational aims The aim of this module is to examine the management of private real estate portfolios. The course will consider the investment strategies pursued by investors in real estate portfolio management including: market analysis, asset management, regional & sector diversification and international investment. Learning outcomes Understand techniques of index construction in real estate and the implications in relation to performance and risk measurement Understand the key issues in the management of real estate portfolios and the asset s role in a mixed asset framework Understand the primary issues involved in international investment and diversification both in real estate and in capital market assets Syllabus Real Estate Market Analysis & Investment Strategies Application of Portfolio Theory to Real Estate Real Estate Portfolio Diversification Real Estate in a Mixed-Asset Portfolio Private Real Estate Funds International Investment & Diversification Alternative Asset Classes Reading list Brown, G. & Matysiak, G., (2000) Real Estate Investment, FT/Prentice Hall. 10
Property Valuation SMM173 (MSc Real Estate) Module leader Sessions Assessment George Herd, Senior Lecturer 10 x 3 hour sessions, plus tutorials This module will be assessed bycoursework (25%) and an examination (75%) Educational aims This course aims to provide an overview of current valuation techniques commonly used and the legal background to both the valuation process and to the real estate markets generally. The course will discuss and explain current UK valuation methodologies and examine legal issues relevant to the valuation process. Learning outcomes Appreciate the factors that underlie property values Be able to value a property based on current UK valuation standards Understand the different valuation approaches available Have an understanding of current landlord & tenant Law and how to apply it in the valuation process Understand the general principles of compulsory purchase legislation including the assessment of compensation for land taken and disturbance Syllabus Current UK valuation methodology The implications of taxation in valuation Landlord and Tenant Law Compulsory purchase Planning Law in outline Reading list Mackmin, Davies and Shapiro (2009)Modern Methods of Valuation of Land, Houses & Buildings (10 th ed), Estates Gazette. Hayward (2008), Valuation: Principles into Practice, Estates Gazette Millington (2001). An Introduction to Property Valuation. Estates Gazette. Baum & Crosby, (2007) Property Investment Appraisal, Routledge. 11
Quantitative Methods SMM196 (MSc Real Estate Investment) Module leader Sessions Assessment Dr Fotis Mouzakis, Lecturer 10 x 3 hour sessions This module will be assessed bycoursework (25%) and an examination (75%) Educational aims This module introduces contemporary statistical techniques with a focus on applied real estate research. The module seeks to introduce techniques and concepts within the context of tenant market and investment portfolio research. The techniques learnt in this module will be applied and expanded on in other modules. Learning outcomes Understand the application and the use of contemporary research methods applied to real estate data Be introduced to multivariate econometric analysis Gain experience in the application of these methods on real estate topics Be able to evaluate the outcome of empirical analysis in applied research Syllabus Introduction to regression analysis Multivariate regression analysis fundamentals and testing Relaxing the assumptions of the classical model Heteroscedasticity Autocorrelation Model specification and testing Structural instability and measurement errors Dynamic econometric models Simultaneous equation models Non-stationarity and co-integration Reading list Salvatore, D. (1982) Schaum's Outlines - Statistics and Econometrics, McGraw-Hill 12
Quantitative Methods In Investment SMM679 (MSc Real Estate) Module leader Sessions Assessment Dr. Mark Andrew, Senior Lecturer in Finance 10 x 3 hour sessions This module will be assessed byan invigilated test(25%) and an examination (75%) Educational aims This module introduces students to the basic concepts of quantitative and statistical techniques. The techniques learnt in this module will be applied and expanded on in othermodules. Learning outcomes Be familiar with the main quantitative techniques and statistics used in analysing real estate markets Be able to construct and use appropriate indices in analysis Understand and be able to describe data descriptively Understand and be able to use statistical theory to make inferences from samples Be able to analyse a variable whose value changes over time Be able to look at casual and non-casual relationships between variables Syllabus Data Transformations: percentage changes; levels; indexation; real and nominal terms Descriptive Statistics: presenting and summarising data Inferential Statistics: probability, probability distributions, expected values, estimation, hypothesis testing, correlation and covariance Time Series analysis: components; de-trending series Regression Analysis: simple regression, multiple regression Reading list Hill R.C., Griffiths W.E. & Judge G. (2001) Undergraduate Econometrics, 2nd Edition, Wiley. 13
Real Estate Asset Management SMM191 (MSc Real Estate) Module leader Sessions Assessment Stephen Lee, Senior Lecturer in Real Estate Finance 10 x 3 hourly sessions This module will be assessed byan invigilated test(25%) and an examination (75%) Educational aims The aim of this module is to provide a comprehensive coverage of the management of real estate as an asset. While the course will examine many aspects of asset management from a portfolio perspective it will also examine other issues. The course will look at the asset management of properties and how investors can add value. It will also examine real estate s role from the perspective of a corporate occupier. Learning outcomes Understand the relationships between corporate strategy and real estate Understand the techniques of asset management Gain an appreciation of the role of property in the corporate sector Have a broad understanding of the perspectives and functions of property asset management Syllabus Adding asset value Extracting asset value Relocation case study Current issues in asset management Reading list Haynes B and Nunnington N, (2009) Corporate Real Estate Asset Management: Strategyand Implementation, EG Books Edwards V and Ellision L, (2003) Corporate Property Management: Aligning Real Estate withbusiness Strategy, Blackwell Cooke H and Woodhead S, (2007) Corporate Occupier s Handbook, EG Books 14
Real Estate Capital Markets SMM188 (MSc Real Estate Investment) Module leader Sessions Assessment Tony Key, Professor Real Estate Economics: Lecturers Alex Moss, Consilia Capital; Simon Martin, Tristan Capital Partners; Nick Motson, Lecturer in Finance 10 x 3 hour sessions This module will be assessed by coursework(25%) and an examination (75%) Educational aims The course aims to provide comprehensive coverage of the real estate capital markets. The module will not only provide details on the structure of these securities and markets but also examine how they can be used in the context of issues such as real estate portfolio construction & asset allocation, hedging and financing. The course will also highlight the different characteristics of many of these securities to those commonly traded in the investment markets. This is particularly the case with Real Estate Investment Trusts (REITs) where the contrast with the standard corporate structure, with respect to both corporate finance issues and investment behaviour, will be highlighted. Learning outcomes Be aware of the alternative means of investing in real estate and the different characteristics of these securities and vehicles Appreciate the differences in relation to corporate finance issues of REITs and conventional corporate vehicles Understand the investment dynamics of the traded real estate security sector Appreciate the potential uses in a portfolio context of real estate derivatives. Syllabus Introduction to real estate equity vehicles Background to real estate investment trusts REITs and corporate finance Market dynamics and investment performance of traded real estate vehicles Real estate derivatives Introduction to the securitised debt markets Initial reading list Chan, Erickson & Wang, (2002) Real Estate Investment Trusts. Oxford University Press Fabozzi, F (2005) The Handbook of Mortgage Backed Securities. McGraw-Hill 15
Real Estate Debt Markets SMM177 (MSc Real Estate Investment) Module leader Sessions Assessment Fotis Mouzakis, Lecturer 10 x 3 hour sessions This module will be assessed by coursework(25%) and an examination (75%) Educational aims Recent years have seen a large rise in the used of debt finance in the sector, plus a rapid evolution in the use of debt securitisation in the form of mortgage backed securities and other instruments. An understanding of the role of debt in the real estate market, in the financing of funds and individual projects is therefore a core skill for investment professionals.the module will equip students with knowledge of debt instruments, risk mitigation techniques, and debt securitisation used in the financing of real estate, and the structuring of debt instruments as investment products. Learning outcomes Understand the financial principles underlying debt financing. Understand how debt can be packaged into securitised products. Understand the pricing and risk rating of securitised debt products. Apply interest risk management techniques to real estate debt financing. Construct robust models of cash flows from securitised debt pools. Syllabus Introduction to real estate financing Interest rate hedging and derivatives Analysis and modelling of the yield curve Commercial Mortgage Backed Securities (CMBS) The structuring, pricing and risk rating of CMBS pools Real estate security debt and bonds Collateralised Mortgage Backed Obligations Credit derivatives Credit risk modelling Initial reading list Fabozzi, F. 2006 The handbook of mortgage backed securities, 6th 3d, McGraw-Hill. 16
Real Estate Development And Planning SMM179 (MSc Real Estate) Module leader Sessions Assessment Bill Rodney, Senior Lecturer 10x 3 hour sessions This module will be assessed by coursework(25%) and an examination (75%) Educational aims This module is intended to provide students with an understanding of the major elements of the real estate development process and how these components can be integrated to create viable and successful projects. The module will provide the student with the fundamentals of how to analyse, develop and operate a range of real estate development projects. Module material, lectures and cases concentrate on the identification and evaluation of the critical assumptions and issues related to feasibility, financial feasibility, planning, acquisition, construction and operation of economically viable commercial real estate projects; the development process and a comparison of the risks and the financing issues associated with properties in development versus existing properties. Learning outcomes Carry out quantitative appraisal and risk analysis of real estate projects. Understand equity and debt finance techniques and their application to property development. Appreciate various technical and analytical approaches involved in appraisal of major capital projects. Critically evaluate the factors that influence development decisions. Syllabus Stages in the Development Process Development cycles Appraisal techniques from the basics to cash flows with finance Application of planning / zoning regulation and building control The rationale and techniques of development and redevelopment Financing development through debt and equity Reading list Cadman, D. Wilkinson, S. and Reed, R. (2008) Property Development, 5 th Ed., Routledge Isaac, D. (1996) Property Development Appraisal and Finance, Macmillan Miles M, Berens, G and Weiss, M (2000) Real Estate Development: Principles and Process, 3 rd Ed., Urban Land Institute 17
Real Estate Economics SMM174 (Msc Real Estate and Msc Real Estate Investment) Module leader Sessions Assessment Professor Tony Key, Professor of Real Estate Economics 10 x 3 hour sessions This module will be assessed by coursework(25%) and an examination (75%). Educational aims The object of the module is to introduce students to the basic principles of economics, and the primary ways in which those principles are useful in the analysis of real estate performance and real estate markets. Particular attention will be paid to the impacts of changes in the economy on rental values, development activity, and real estate returns. Throughout the principles examined will be applied to real-world illustrations of real estate trends, cycles and market structure. Learning outcomes Understand the key principles of macro-economics and micro-economics Apply general economic principles to the analysis of real estate markets Understand core concepts of the real estate cycle, the allocation of land between uses Syllabus Basic micro economics, utility and household consumption, theory of the firm Introductory macro-economics: national accounts and the flow of income Keynesian and monetary approaches to analysis and policy Economic and real estate: occupier, investment and development markets Business cycles, cobweb theory and real estate cycles, fundamentals of forecasting The determination of rent, relationships between land rents and building rents Introduction to the economics of location, bid-rents and land allocation Public intervention in real estate markets Reading list Sloman, J. (2003), Essentials of Economics (3 rd ed), Financial Times / Prentice Hall Jowsey, E., and Harvey, J. (2003), Urban Land Economics (6 th ed), Palgrave Macmillan Ball, M., Lizieri, C., and MacGregor, B. (1998), The Economics of Commercial Property Markets, Routledge 18
Real Estate Finance SMM192 (MSc Real Estate) Module leader Sessions Assessment Bill Rodney, Senior Lecturer 10 x 3 hour sessions This module will be assessed by coursework(25%) and an examination (75%). Educational aims The aim of the module is to enable the student to develop an appreciation of the various techniques available in commercial real estate finance, to identify the different sources, both of dept and equity finance and to examine how risk and reward can be shared. Learning outcomes Have an overview of the current commercial real estate finance market Understand, analyse and compare alternative commercial real estate funding techniques Select appropriate types of provider of commercial real estate finance Syllabus The sources and supply of commercial real estate finance Alternative techniques of funding and finance, together with their implications for risk and return Direct and indirect methods of funding Risk limitation instruments Financial partnership and joint ventures Reading list Isaac, D., (1998) Property Finance, Macmillan Brown, G. & Matysiak, G., (2000) Real Estate Investment A Capital Market Approach, FT/Prentice Hall 19
Real Estate Investment and Financial Analysis SMM197 (MSc Real Estate Investment) Module leader Sessions Assessment Stephen Lee, Senior Lecturer in Real Estate Finance 10 x 3 hour sessions This module will be assessed by coursework(25%) and an examination (75%). Educational aims The module will equip students with the knowledge of information sources, financial theory, and modern appraisal techniques which underpin the appraisal and financing of real estate assets, with an emphasis on the practical modelling methods which constitute global best practice in these fields. The module covers a core set of skills for the analysis of real estate investments essential to an understanding of market behaviour plus the practices of asset pricing and development in the industry. It comprises two main elements. First is investment appraisal. Here the focus is on the adaptation of standard discounted cash flow methods to real estate valuation and investment appraisal. Special emphasis is put on the linkages between discounted cash flow methods and conventional methods based on capitalisation rates, the use of risk assessment tools such as sensitivity testing, and the practical construction of appraisal models in Excel. Second are the methods of financing real estate investments and development projects. This element of the module provides the theoretical and practical background of equity and debt finance, including optimum capital structure comprising equity, senior and mezzanine debt. Earning outcomes 20 Understand the basis of discounted cash flow methods of investment appraisal Critically assess the robustness of assumptions used in appraisals, and the impact of risk on appraisal results Syllabus Financial mathematics, compounding, discounting and real estate cash flows Real estate appraisal by discounted cash flow methods Reconciliation of discounted cash flow and conventional appraisal methods Risk assessment, scenarios and sensitivity testing in appraisals The treatment of taxation, depreciation and leverage in appraisals The principles of equity and debt finance and their application to real estate Senior and mezzanine debt and optimum capital structure Reading list Baum, A., and Crosby, N. (2007), Property Investment Appraisal (3 rd ed), Wiley-Blackwell
Real Estate Investment and Market Analysis SMM195 (MSc Real Estate Investment) Module leader Sessions Assessment Tony Key, Professor of Real Estate Economics 10 x 3 hour sessions This module will be assessed bycoursework(25%) and an examination (75%). Educational aims The module will equip students with the knowledge of information sources, market analysis methods and modern appraisal techniques which underpin the valuation and investment appraisal of real estate assets, with an emphasis on the practical modelling methods which constitute global best practice in these fields. The investment appraisal element of the module focuses on the adaptation of standard discounted cash flow methods to real estate. Special emphasis is put on the linkages between conventional and discounted cash flow methods and the practical construction of appraisal models in Excel. The second element of the module covers the acquisition and analysis of the market evidence needed to generate real estate appraisals. This includes the use of market indicators to evaluate market pricing and investment potential, plus the theoretical and practical background of trend analysis and forecasting methods. Learning outcomes Understand the basis of conventional and discounted cash flow methods of investment appraisal Critically assess the impact of risk on appraisal results Construct cash flow models for real estate assets and apply risk assessments to those models Compile and critically review analyses of real estate markets Syllabus Financial mathematics, compounding, discounting and real estate cash flows Real estate appraisal by conventional and discounted cash flow methods Risk assessment, scenarios and sensitivity testing in appraisals The treatment of taxation, depreciation and leverage in appraisals Data sources and standard techniques in real estate market analysis Statistical techniques for trend analysis and basic forecasting models Reading list Baum, A. & Crosby, N., (2007) Property Investment Appraisal (3 rd ed), Routledge Fraser, W. D., (2004) Cash-flow Appraisal for Property Investment, Palgrave-Macmillan 21
Real Estate Modelling and Market Dynamics SMM190 (MSc Real Estate Investment) Module leader Sessions Assessment Professor George Matysak, Henley-Reading Business School 10 x 3 hour sessions This module will be assessed by coursework(25%) and an examination (75%). Educational aims This is an applied econometric modelling course. It aims to provide students with comprehensive coverage of the application of alternative modelling techniques. The course examines modelling issues across the range of real estate related assets and markets. The course aims to illustrate the challenges in modelling such markets due to factors such as data limitations. The module will contain a mixture of theoretical constructs and the application of these in an applied econometric setting. Learning outcomes Be comfortable with both the quantitative methods used in the course and their application in a real estate context Appreciate the linkages between the theoretical background of real estate economics and applied modelling Have an in-depth appreciation of the techniques available in the modelling of market behaviour in the private real estate market Have an understanding of simulation approaches and their uses Syllabus Modelling real estate cycles Simultaneous equation models Rent adjustment models Vector autogressive models Regime switching and structural breaks Introduction to panel modelling Modelling housing markets Simulation: historical, bootstrapping and Monte Carlo Reading list The material for the course will be given in lectures, drawn from key journal papers on econometric and quantitative modelling of real estate markets. 22
Business Research Project SMM800 (MSc Real Estate and MSc Real Estate Investment) Module leader Sessions A project supervisor will be allocated. 4 x 3 hour sessions This is an individual project which students will develop in their own time with support from their project supervisor. Assessment Coursework 100% Delivery of the final project, indicative length: 8,000 words Educational aims To train students to undertake individual research and provide them with an opportunity to specialise in a contemporary business or finance topic related to their future career aspirations. To integrate and apply concepts from different aspects of their MSc. Learning outcomes On completing the project students will be able to: Identify specific business or finance related issues which would be useful to research and shape an achievable research question around them. Develop a research question and plan and carry out a research programme to address the question. Understand the theories and recent research relating to the project topic. Understand how to apply research methodologies to practical business and commercial issues. Show confidence in overcoming problems raised in the course of a practical research project. Accept the challenge of carrying out a piece of research with elements of originality. Project requirements The choice of project is your responsibility. It is most important that you choose an area you are happy to work in, and in which you are confident of your abilities. Students are encouraged to start thinking about project ideas at the beginning of their studies. By the end of the first term you will have gained sufficient knowledge to start to develop ideas that can be discussed with faculty. We expect you to identify the basic idea or research question, though this is likely to be modified after discussion with academic staff. 23
Make effective use of the RPMS module. This module can be used to help to formulate your ideas and design an appropriate methodology. It can also help you develop a specific project topic the greater clarity you have about the topic of your project the more successful it is likely to be. The types of project allowed are: What you can do. What you can t do Business report on a contemporary issue Business plan Statistical test of literature driven hypothesis Empirical feasibility of a financial strategy Development of a new product/ service / finance strategy Market survey Pure literature surveys Some evidence that the writer has learnt a new subject, a sort of extra elective A synthesis of other writing or a piece of journalism A mere compendium of facts and statistics Projects totally unrelated to relevant academic discipline and literature. Case study on a specific issue within a particular company / organisation Numerical project that describes and implements one or more numerical methods for pricing, hedging or reserving for derivatives or portfolios. Reading lists Student research and reading list will be defined by the subject matter of the project. 24
Elective Information Cass Business School provides an extensive range of elective modules for the different MSc programmes. A special elective handbook, regarding your term three selection of modules, will be distributed in the second term and will provide further information. Electives which have previously been provided by MSc Real Estate and MSc Real Estate Investment include: Real Estate Securitisation Residential Markets Professionalism Building Project Management and Procurement Apart from those electives students will also be able to choose from preselected modules offered by other MSc programmes. In the past these have included: Project Finance Corporate Restructuring Consulting Skills Please note the School reserves the right to withdraw an elective if demand is insufficient and to add new electives if they are available. Space restrictions and timetable availability may also affect the availability of electives. 25
Section 4 Regulations Described below are the rules governing the award of a MSc in Real Estate and MSc in Real Estate Investment. For further information, the City University s complete set of Ordinances and Regulations, including the Assessment Regulations (Regulation 19) are published on the University s website http://www.city.ac.uk/about/education/academic-services/senateregulations Periods of Registration The periods allowed for completion of the qualifications are: Four years for a masters degree, full or part time Two years for a postgraduate diploma, full or part time Degree Requirements To qualify for a Masters degree a candidate must achieve at least 50% as an aggregate mark for each module and an overall degree average mark of 50%. This will result in the acquisition of 180 credits, which is the number required to achieve a master s degree in Real Estate or Real Estate Investment. Assessment Calculations The rules governing calculation of module and overall degree marks are as follows; To receive credits for a MSc all modules must be passed There are no minimum mark requirements for separate assessment components (unless specifically stated). However, it is compulsory to complete all components and no module mark can be awarded until these are completed. A module mark is calculated by aggregating marks for all assessment components as stated in the module outline (section three). Where modules are assessed by both exam and coursework, these are weighted to calculate the module mark. Please see the assessment matrix in section two for the relative weightings. Where there are several pieces of coursework, the coursework results are calculated according to the relevant weightings. To calculate the overall degree mark, module marks are combined using weightings in line with the relative credit value of each module. 26
Coursework All coursework and invigilated tests are compulsory and count towards the final degree. In some modules presentations or invigilated tests may replace written coursework assignments. Some subjects may be assessed by coursework only. Precise details concerning examined and non examined modules are provided in the module outlines. Please note coursework is required to be submitted for assessment by the specified deadline date. Late coursework will receive imposed penalties. Late coursework will immediately receive a deduction of five marks on the first day of lateness, with one further mark deducted for each day of lateness, for a maximum of five days. After this point coursework will not be accepted and a mark of zero will be awarded. All coursework should be submitted electronically via the virtual learning environment, Moodle.It is essential that you keep a copy of all coursework submitted. All sources used should be cited using the Harvard referencing system. Further information about this can be found on the Cass website: http://www.cass.city.ac.uk/intranet/student/learning-resource-centre/citing-references Coursework will be returned to students as quickly as possible with the aim of students receiving feedback within three to four weeks of their submission Failure and the Resitting of Modules Any module with an aggregate mark of less than 50% is deemed to have been failed and will have to be re-sat. To re-sit a failed module, a candidate must re-do all assessment components which gained marks of less than 50%. Candidates may re-sit a module only once. A candidate who successfully completes a re-sit will be awarded the credits for the module. The mark awarded for the components will be capped at 50%. The mark awarded for other components will be the original mark. This mark will also be used in calculating the overall degree mark A candidate who does not pass his or her re-sit by the date specified by the Assessment Board will not progress on the programme and the Assessment Board will normally make a recommendation that they withdraw. Award of Distinction To calculate the overall degree mark all module marks are combined using the weighting in the assessment matrix table. The award of distinction for the masters is based on: An overall degree mark of at least 70% with no modules failed at first attempt. 27
Award of Merit To calculate the overall degree mark all module marks are combined using the weighting in the assessment matrix table. The award of merit for the masters is based on: An overall degree mark between 65% - 69.9% inclusive and no modules failed at first attempt Or an overall degree mark of 70% or more and one module failed at first attempt Postgraduate Diploma A student who has not accumulated enough credits to be awarded a masters degree may be awarded a postgraduate diploma provided they have satisfied the following conditions: The total number of credits gained is equal to or greater than the minimum credits stipulated in the programme specification for the award of a diploma. For the award of a diploma a student may compensate a maximum of twenty core or core elective credits provided the following conditions are met: The mark achieved for the module(s) to be compensated is at least 40%. The average mark of all modules to be counted towards the diploma, including those modules to be compensated, is at least 50%. Note that: The diploma average will be calculated in the same way as the masters average as specified in the programme specification. The award of distinction and merit will also be calculated in the same way for the masters degree, as specified in the programme specification. 28
Grade Related Criteria Class % Literary Knowledge Independent thought, uses of sources and research materials Distinction Merit Pass Fail (0%-49%) 85-100 80-84 75-79 70-74 65-69 50-64 41-49 20-40 A Outstanding Excellent Comprehensive and informative knowledge of subject area, may include new knowledge derived from which the marker and wider community may learn; addresses the learning outcomes/ assessment criteria in full Very good Sophisticated or strong - shows knowledge of complex issues or a broad range of issues and addresses the learning outcomes/assessment criteria well. B Good Sound knowledge of a broad range of issues or detailed knowledge of a smaller number of issues; makes a good attempt to address the learning outcomes/assessment criteria, realising all to some extent and some well C Satisfactory Adequate knowledge of important issues some level of response to all learning outcomes/assessment criteria but may not include important elements or information that is fully accurate. D Poor Unsatisfactory work - inadequate knowledge of the important issues and doesn t succeed in grasping key issues, therefore learning outcomes/ assessment criteria will not be realised E Very poor Knowledge is lacking either through omission, the inclusion of large amounts of irrelevant information or evidence of significant misunderstanding - totally inadequate attempt to address the learning outcomes/ assessment criteria Where relevant, evidence of independent reading, thinking and analysis and strong critical ability Where relevant, show evidence of wide and comprehensive reading and critical ability Evidence of thorough research of the topic(s) but some answers may not be complete or arguments sufficiently explored. Some critical ability will be evident. Where relevant, development of ideas is limited but attempts will be made to analyse materials critically No real development of ideas and critical analysis will be very limited. No critical ability will be displayed Presentation Well-constructed Clearly written Well-structured and logically written Expression and structure may lack clarity Presentation is confused or incoherent Confused, incoherent or unstructured presentation Professional Professional approach to academic practice; professional standard generally Adhere to the principles of good academic practice Demonstrate good academic practice Evidence of good academic practice will be limited General ignorance of good academic practice may be evident Ignorance of good academic practice will be evident 29
Section 5 Additional Information MSc Course Office The MSc course office is here to support both staff and students and each MSc course has its own dedicated Course Officer that you will get to know over the course of your time here at Cass. The Course Office team will provide you with course-related information, material and your grades, advice relating to other areas of City University and support throughout the duration of your studies. Location The course office is located on the 3 rd floor of Cass Business School, 106 Bunhill Row, London EC1Y 8TZ You can contact the course office team either in person at the office, by email, telephone or via Moodle, our virtual learning environment. The MSc Real Estate and MSc Real Estate Investment Course Officer is Zoe Own and can be contacted directly via telephone 020 7040 8211 or by email Z.Owen@city.ac.uk Office Opening Hours During term time the course office is open to students: Monday 1300 1830 Tuesday 1300 2000 Wednesday 1300 1830 Thursday 1300 2000 Friday 1030 1530 Outside of term time the course office is open to students: Monday to Thursday 1300 1700 Friday 1030 1530 Moodle: Your Virtual Learning Environment Moodle is the virtual learning environment used at City University and it provides a wide variety of information and interactive environments to students, including the following: Module material and supplementary learning documents, including areas for the submission of coursework and the release of coursework results. Timetables, including teaching and examination. 30
Specialist Masters, MSc specific and module pages providing information relating to each area with supporting documents and forums. Links to the Learning Resource Centre, Careers, Student Advice and Clubs and Societies. Students are responsible for checking their Moodle pages and their City email account regularly. This is how all information, including changes to teaching, is communicated. Course Officers manage the communications sent to students via Moodle and all administrative enquiries should be directed to them for assistance. Personal Tutors Postgraduate Taught students are assigned a personal tutor at the beginning of the year. This personal tutor will be available to provide general academic, professional and pastoral support and will also ensure students are aware of the additional and more specialised support mechanisms available within the University. Students should have the opportunity to see their personal tutor at least once a term; however it is the student s responsibility to contact their personal tutor to make an appointment. The Course Office team is also here to assist should you need any support during the course of your studies. Academic Staff Contact Details In addition to their main teaching responsibilities academics also engage in research, administration and external work. As a result staff members may not be able to see you without an appointment. If the matter is non-urgent please make an appointment or make use of the office hours many academics hold. If the matter is urgent please make this clear when contacting the member of staff to request an appointment. Lecturer s contact details and office hours can be found on Moodle. The Royal Institution of Chartered Surveyors Both the MSc Real Estate and MSc Real Estate Investment are fully accredited by The Royal Institution of Chartered Surveyors (RICS), which is the professional body for the real estate industry. The RICS now has very active branches in many other countries, and RICS membership is recognised globally as a high quality professional qualification. The course accreditation means that students completing their Masters degree may apply to become full Members of the RICS. Full membership of the RICS is awarded on passing an Assessment of Professional Competence (APC). This can be taken after two years' practical experience and takes the form of a diary or work done during that period, a project submission and an assessment panel. The two year period starts shortly after the award of the Masters degree. Students intending to follow this route should make sure they are up to date with requirements for the APC, available from www.rics.org/apc or 020 222 7000. 31
While you are studying for your Masters degree you are strongly advised to become a student member of the Institution. This has benefits including invitations to events through the year and access to the RICS library. An RICS representative will give more information on membership and application forms, during in the Induction period. The Investment Property Forum The Investment Property Forum recognises the MSc Real Estate Investment as providing relevant skills necessary for those operating in the property investment market. Under this arrangement graduates of the course will be offered membership of the Forum, subject to the requirement that the graduate should have a minimum of two years relevant work experience in the property industry. Graduates who meet the above criteria will be invited to join the IPF. Applicants will be expected to fill in an IPF application form, and will need proof of their relevant work experience and their successful graduation from this programme. Real Estate Careers You should be starting to think about your career objectives when you start the course. Many of the major employers of new graduates set deadlines for applications before the end of December and complete their recruitment by March. And an idea of the type of job you want to get will help to shape your choice of topics for the Business Research Project and Elective modules. The Cass Careers Service is there to help with information on employers, writing applications, and preparing for interviews. The strong reputation of Cass real estate graduates means that many of the major employers among surveying and financial firms will hold information sessions on recruitment at Cass or at their own offices, most of them in the first term. A careers fair for real estate employers will also be held during the induction period. Details of all these events specific to real estate will be e-mailed to you. There are also many potential employers of real estate graduates in other major sectors such as banks and management consultants. The leading firms in these sectors will also be visiting Cass as for careers sessions organised for other programmes, so you should attend events for any employers you are targeting. Cass will provide you with a lot of support in looking for employment, but cannot get a job for you. There are many potential employers you will have to seek out yourself, especially smaller firms who do not have regular graduate entry programmes, nor visit Cass. The market remains very competitive, and there is a lot you can do to make the right choice and to increase your chances of a successful application. You should, for example, use the websites of firms to research what they do, keep up with the job advertisements in Estates Gazette, Property Week and Wednesday s Financial Times, and take the opportunity to meet up with Cass alumni at events through the year. 32
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Cass Business School 106 Bunhill Row London EC1Y 8TZ T: +44 (0)20 7040 8600 www.cass.city.ac.uk/masters